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Nigeria: a compelling telecom growth.

Nigeria is widely recorgnised as a major market for Telecommunications Equipment and service in the African Continent. With a population of over 140 million, Nigeria remains Africa's most populous nation and is in fact home to at least one fifth of the population of Africa.

Nigeria is also blessed with abundance of natural resources and is the 8th largest producer of oil in the World. The nation therefore has what it takes to attract attention of potential investors to this largely untapped telecommunications market.

The Government of Nigeria is conscious of the role telecommunications can play in national development and is therefore committed to ensuring that the telecommunications facilities and services are expanded rapidly. Since the democratic governance was ushered in 1999, the attention of the world had turned to Nigeria as the Country with the highest potential for ICT investment in the continent. Nigeria has therefore continued to attract the attention of serious local and multinational investors that have come to take advantage of the investment potentials that the nation presents.


The Nigerian Scenario: Progress

Regulatory body, the Nigerian Communications Commission, NCC, was established in 1992, (one of the oldest in Africa), when government decided to deregulate and liberalize the telecom industry. The NCC has over the years enjoyed full support from the highest level of government to be able to perform its roles. Today NCC is rated as one of the foremost regulatory bodies in the world. Legal and Regulatory framework has been crafted to attract and protect investors, ensure a level playing field and ensure consumer protection.

Though some companies were issued licenses before 1999, full market liberalization only commenced in earnest with government enacting a new Telecom Policy document in September, 2000; produced after full stakeholder consultations. A number of major Private Telecommunications Operators were subsequently licensed to provide multifarious services including mobile, fixed, internet, broadband and multimedia services. A new law, the Nigerian Communications Act was also enacted in 2003 to boost investor confidence and provide clear rules of engagement for industry stakeholders.

Private investment in the sector has grown from about $50m in 1999 to over $12 billion by December 2007 with commensurate rapid growth in subscriber lines.

The nation's teledensity stands at 48% with about 67,000,000 connected active lines by end of April 2009.

The Nigerian Scenario: Prospects

Despite the progress made so far, Nigeria remains a major market for ICT services. With a teledensity of just 48% for a population of 140 million, the need to continue the expansion of the nation's ICT infrastructure represents tremendous opportunity to prospective operators for voice, internet and broadband services. Four GSM mobile operators which were licensed in 2001 and 2002 by way of a competitive, open and transparent auction process have substantially contributed to the average annual growth of over 7 million lines in the past seven years. Nigeria recently introduced the Unified Access Service License, enabling the operators provide several services under a single authorization. All the companies providing GSM mobile services have been issued the USA Licenses on request. A fifth operator was also issued a Unified Access Service License by the Commission including a fifth GSM spectrum license and had rolled out services in October 2008.

There are other Unified Licensees who are also providing mobile, fixed and internet services on the Code Division Multiple Access(CDMA) platform.

Some of the major operators who were offering services on the GSM or CDMA platforms since 2001 have recently deployed 3G services. In Nigeria today, mobile phone users can have access to their mails or surf the Internet using their mobile devices. Nigeria thus remains a truly technology neutral operating environment.

Nigeria is also a major market for long distance network operators and with her Central location has potential to be the ICT hub for the West African region. Nigeria equally possesses ingredients in terms of market size and population that could support local manufacturing.

We therefore believe that this period represents a good time for investment in Nigeria's Telecommunications sector.

As the economy of the nation continues to look up and with pressures from international businessmen, government, educational institutions, global financial markets, and the position of Nigeria as a major commercial center in the West African region, the demand for reliable and modern ICT infrastructure facilities and services is heavy. Nigeria is therefore a major market for Communications equipment and services in technology areas such as Digital transmission systems (including microwave, satellite and optic fibre).

The present administration of President Umar Musa Yar' Adua has placed a new emphasis on the growth of broadband and Internet all over the country as a way to promote comprehensive ICT access to all citizens of the country. The current direction of the government is to help harness the potential of ICTs in achieving the long term vision of becoming one of the major 20 economies in year 2020.

Serious Investors are welcome to invest in any of these major areas or join forces with existing licensees, some of whom are also anxious to team up with major operating companies around the world.

The Federal Government of Nigeria is strongly committed to providing the right policy and regulatory environment that encourages massive investment in the ICT sector. Government will continue to be open to receiving suggestions on favourable investment policies and incentives that investors require to continue to invest the necessary private capital to build Nigeria's information technology infrastructure.

Nigeria, no doubt, has a crucial role to play in narrowing the digital divide between Africa and the developed world. Our vision is to position Nigeria among the information-rich economies of the world. We are aware that the world is looking up to Nigeria to take advantage of its vast human and material resources and become the catalyst for the economic development of the Continent.

We intend to achieve this by continuing to adopt open and pro-competitive regulatory policies and creating attractive investment climate.


* Adoption of open market approach which has promoted rapid deployment of ICT services nationwide, resulting in exponential growth in the number of telephone lines.

* Connected lines only grew at an average of 10,000 lines per annum in the four decades between 1960 and 2000. From 2008, the rate has increased to about 1.2 million per month. As of end of April 2009, Nigeria had attained 67 million of (fixed & mobile) active-subscriber base.

* Total teledensity which was less than 0.4% (0.4 lines per 100 inhabitants) in 2000 has soared to 48% by end of July 2008 (relative to the current population figure of 140 million). All the States of the Federation are covered by both services. At least two operators are present in all the 36 States and the Federal Capital. Landmass coverage is estimated at around 65% Substantial population coverage Significant growth in Sector contribution to growth of GDP

* The emergence of digital mobile services has led to improvements in efficiency and productivity, reduction in transaction costs, increased service innovation and better quality of life. More than 12,500 persons rave been directly employed by the telecom operators and millions of Nigerians are benefiting from indirect employment generated by the service providers.

* There is a nationwide network of dealers, vendors, and retailers of mobile phone accessories of ubiquitous "Umbrella-Call centers" handling calls and providing access to services.
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Publication:New African
Geographic Code:6NIGR
Date:Oct 1, 2009
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